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You May be a Client’s Bank Don’t Become a Charity. Establish Standard Operating Procedures

As a commercial collection agency since 1979 we regularly see claims that are way past due. Businesses hold past due invoices for a number of reasons, but the number one reason is that they are afraid of losing a client. Remember no matter how long and well you know them, if they don’t pay they are no longer client. We all understand that it has been difficult for businesses to make money in the past few years and they may not be able to pay the invoice at the time. There is no excuse for not returning calls, replying to emails or letters or communicating with you regarding their financial circumstances; especially if they have been a client for a number of years.

The Commercial Law League Agency Section of which we are a member, reports that the probability of full collection on a delinquent account drops dramatically with the length of delinquency. For three months the probability off collection drops to 69.6%, after six months to 52.1% and after one year drops to 22.8%.

We recommend that you establish standard operating procedures for Accounts Receivable. On the 80th day you send a final demand letter and if nothing happens in 10 days, the collection agency takes over. If you follow my recommendations for Terms to Include on Credit Applications article, you can be compensated by the debtor for their delinquency.

With the New Year quickly approaching, now is great time to make changes in your procedures. Don’t become a charity unless you want to give.

 

Bradford Marcus

The Atwell Companies

204 Stonehinge Lane

Carle Place, NY 11514-0363

Tel:  516.622.9030 ext. 341

Fax: 516.393.7585

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